Debt Ceiling Update: Biden Signs Increase Into Law

Mandatory Credit: Photo by Shawn Thew/UPI/Shutterstock (12643361i)President Joe Biden delivers remarks prior to signing an executive order on delivering the government services and experience the American people expect and deserve during a ceremony in the Oval Office of the White House in Washington, DC, on Monday, December 13, 2021.
Shawn Thew/UPI/Shutterstock / Shawn Thew/UPI/Shutterstock

The federal government was in danger of a U.S. default on its debt until Thursday, Dec. 16, when President Joe Biden signed a law to raise the debt ceiling. The legislation increases the government’s borrowing limit by $2.5 trillion, CNBC reports.

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With the increase, the government should be able to cover its debt obligations through 2022. Had the bill not been signed, the U.S. government would have defaulted on its debt for the first time in history. The U.S. Treasury had estimated the government would run out of tools to pay its bills by yesterday, Wednesday, Dec. 15.

Increasing the borrowing limit to prevent default may have helped prevent a recession and job loss, said Treasury Secretary Janet Yellen in a statement reported by CNBC.

The law passed without any Republican support. In the culmination of a plan revealed earlier this month, Republicans voted to allow Democrats to raise the debt ceiling with a simple majority vote in the Senate. Senate Republicans did not want to take responsibility for voting to increase the debt limit since the Democrats were responsible for the $1.75 trillion social spending and climate bill.

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However, Yellen pointed out that the debt ceiling would have required an increase this year even without new spending legislation, and raising the debt ceiling only helps to cover existing government expenses, not new spending.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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